While the idea sounds terrific, it can create a mess if you still operate your business bookkeeping systems like you did 30 years ago. If you are fighting a muddle of chaos, chances are that you don’t have a clear updated process in place, and that can do nothing but aggravate and stall your progress.
Let’s take a look at a few of the conveniences we know have available to us when it comes to billing, payments, recordkeeping, and documentation:
- Paperless billing. We are saving trees. But for busy small business owners who don’t take move those email bills into a specific file for payment, bills and invoices can be forgotten or overlooked. They get lost in the 3,598 emails still out there to be opened. In some instances, they can be in one of those social or promotions divisions in your email or, worse, dumped into a spam or junk folder.
- Online bill payments. We are saving postage. But for busy small business owners, this also means we have to keep track of all the logins and passwords for each account. AND, to stay safe and secure online, each account should have a different password and, for additional safety, a two-step authentication process. That could mean answering a bunch of “security questions.”
- Automatic bill payments. Great. We are saving trees and postage. But for busy small business owners, this means that cash flow has to be sufficient to allow for deductions of these automatic payments. Once you get more than a few of these set up, all of a sudden it’s not just cash flow, but maintaining a minimum balance – or a buffer – at all times because you can’t remember what is being deducted when and for how much.
- Online banking and bank statements.Great convenience. Busy small business owners can whip out their phones and make deposits immediately. You can transfer funds between accounts. You just have to remember to download and print the statement at the end of the month. Some banks only keep an archive or three or six months online. If you haven’t accessed it in that time, you have to request a copy from the bank – and pay a fee, of course. As long as you can remember your login and password you can access bank balances at any time, too, which is handy.
- Debit cards. Convenient. Money is immediately removed from your account and there is no interest due because you don’t carry a balance as you would with a credit card. However, your financial advisor will suggest that you not use a debit card online or for major purchases. The protections that exist with credit cards usually do not apply and if your account is hacked, the hacker has direct access to your bank account. In addition, some banks only allow a limited number of debit purchases per month and if you exceed those, you are charged a fee for each additional transaction.
The Age of Bookkeeping
While having a “bookkeeper” sounds very old fashioned, a bookkeeper today is the source of sanity when it comes to the financial aspect of a business. A bookkeeper keeps all those tidbits of data that seem to be floating out in space – or in the cloud as they say today – put in their places and accounted for in your books. A bookkeeper keeps your records up to date and in shape. They account for every bit money and all your assets and keep it concrete and organized. That’s why today, more than ever before, is truly the Age of Bookkeeping.
Business bookkeeping today requires more than just flying by the seat of your pants and checking your account balances to see where you stand. You can’t make decisions when you don’t know where your money is – or where it goes – day by day.
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